By Sophie Diedrichs, Solicitor, Aspiring Law
New minimum wage rates have just been introduced, providing a good time for employers to ensure they’re up with the pay play – remembering the cost of breaching these laws can be more painful than many realise.
As of April 1, the minimum wage, which applies to all employees aged 16 and over, increased, with the new rates raised to:
Adult: $15.75 per hour
Starting-out: $12.60 per hour (up from $12.20)
Training: $12.60 per hour (also up from $12.20)
It’s important to note the starting-out and training minimum wages are 80 percent of the adult minimum wage. There are specific circumstances in which they can apply, and, generally, they’re only available for the first six months of an employee’s work – so it’s wise to check carefully whether or not these lowered rates are legally available in your given situation.
Any change in the going pay rate is a great reminder for employers to double check the wages they’re paying staff, and to ensure they’re meeting the new minimum requirements.
The Ministry of Business, Employment and Innovation (MBIE) has a handy online calculator to help employers calculate what the increases will mean for their business, enable them to plan ahead and make sure they’re covered.
Falling foul of the law on this one, as an employer, can put you before both MBIE and the Employment Relations Authority, so it pays to be across the changes and compliant.
If you’re an employee and reckon you’re being underpaid, pursuant to the laws covering minimum wage provisions, and you’re not having any luck with your employer, your options include taking your concerns to your union, if you’re a member, to a lawyer, or you can contact MBIE, and put a complaint to the labour inspectorate.
The labour inspectorate can review rates of pay and order the employer to increase the wage to the minimum and pay any arrears. As part of that process, the labour inspectorate will also likely request to see copies of all your employer’s wage and other employment records; so, if, over and above failing to pay the minimum wage, investigators find other wrongdoing, the employer could very well end up being sanctioned for those breaches, as well.
Under the Minimum Wage Act 1983, an employee who hasn’t been receiving minimum wage can also seek assistance from the Employment Relations Authority. This is a process which is based on the idea of court, but is essentially free for participants who represent themselves.
The Authority can order an employee’s wage be increased to the minimum wage applicable to them, and that any previous shortfalls be paid. What’s more, it can enforce penalties against the employer, too.
All things being equal, an employee seeking an order from the Authority shouldn’t have too much difficulty in getting one if they really are being underpaid.
Employers, be warned: Not paying employees the minimum wage is reasonably serious employer misconduct, and not something the Authority takes lightly.